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polavach
Returning Member

If one is an active participant in a rental property can the losses be written off against active income? Is so where in TT does one indicate the same?

 
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Zbucklyo
Level 9

If one is an active participant in a rental property can the losses be written off against active income? Is so where in TT does one indicate the same?

If you are an active participant in a real estate rental property, you can fully deduct real estate losses up to $25,000 against active income ($12,500 if married filing separately), as long as your modified adjust gross income (similar to AGI but with some addbacks) is less than $100,000.  Between $100,000 and $150,000 of MAGI, the losses are phased out, so that once MAGI goes above $150,000 you can't take the loss in the current tax year.  Losses that are not fully deductible in the current tax year are carried over to future tax years and can be used to offset other passive income, or can be realized when the property is sold.

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4 Replies
Zbucklyo
Level 9

If one is an active participant in a rental property can the losses be written off against active income? Is so where in TT does one indicate the same?

If you are an active participant in a real estate rental property, you can fully deduct real estate losses up to $25,000 against active income ($12,500 if married filing separately), as long as your modified adjust gross income (similar to AGI but with some addbacks) is less than $100,000.  Between $100,000 and $150,000 of MAGI, the losses are phased out, so that once MAGI goes above $150,000 you can't take the loss in the current tax year.  Losses that are not fully deductible in the current tax year are carried over to future tax years and can be used to offset other passive income, or can be realized when the property is sold.

Ashby
New Member

If one is an active participant in a rental property can the losses be written off against active income? Is so where in TT does one indicate the same?

Under Income & Expenses, you will enter your properties under Rental properties and Royalties

Once you enter the property and you let TurboTax calculate your expenses, It will take you to the screen in the image below.

polavach
Returning Member

If one is an active participant in a rental property can the losses be written off against active income? Is so where in TT does one indicate the same?

I see another question along the same lines : <a rel="nofollow" target="_blank" href="https://ttlc.intuit.com/questions/3272109-rental-property-active-participant">https://ttlc.intuit.co...>. What is the two conditions in the attached link are satisfied bu not the 750 hours or 50% of work related time?
Ashby
New Member

If one is an active participant in a rental property can the losses be written off against active income? Is so where in TT does one indicate the same?

My apologies, I jumped right to real estate professional for some reason. I edited my answer.

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